The expansion into apparel, which comes after years of resistance, is part of Coach's larger plan to transform itself into a full-service lifestyle brand à la Tory Burch. “Instead of designing accessories to fill a need, we’re thinking more about the woman, who she is, where she goes, what is her life like and how does it feel," said Reed Krakoff, president and executive creative director of Coach.

The new blueprint couldn't come at a better time: Coach has been suffering since last year, when its fourth-quarter sales missed analyst expectations and its market share in North America seemed to slip. Back in September, WWD reported that Coach's biggest threats were lifestyle brands like Burch, Ralph Lauren, Kate Spade and Michael Kors, all of which offer clothing in addition to affordable luxury accessories.

So Coach is taking a bet on clothing as well as higher-priced bags (think $400+). Krakoff tells WWD, "Fashion is about a dream. We really have to dream a bit.” Coming from the man who just designed the bulk of Michelle Obama's Inauguration wardrobe, that sounds like a mighty smart plan.

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